Thursday, December 16, 2021
THE GLOBAL SLIDE AND DECLINE IN DEMOCRACY WORLDWIDE | Bryan Walsh writing in Axios Today
The global decline of democracy
Democratic governance is sliding backward in the U.S. and much of the world, according to a series of recent reports.
Why it matters: The future will be shaped by the push and pull of democratic and autocratic forces within countries and beyond their borders. If supporters of democracies can't halt democracy's retreat, freedom and civil liberties could follow.
Driving the news: President Biden held an online Summit for Democracy at the end of last week against the backdrop of pessimistic assessments about the health of democratic government globally.
- In its 2021 report, the nonprofit Freedom House concluded the world is in a "long democratic recession," with democracy improving in only 28 countries while worsening in 73 — the biggest gap of the past 15 years.
- A recent report from the European think tank International IDEA found the number of "backsliding democracies" had doubled over the past decade and the number of countries moving in an authoritarian direction since 2020 outnumbered those going in a democratic direction.
- Data from the Swedish nonprofit V-Dem that was analyzed by the New York Times found the U.S. and its allies were responsible for an outsized share of global democratic backsliding over the past decade.
Between the lines: The data signals that for all the legitimate concerns about the rise of clearly autocratic countries like Russia and China, when it comes to democratic decline, the alarm is coming from inside the house.
- Biden's democracy summit included plenty of steadfast democracies, but also leaders like India's Narendra Modi and Brazil's Jair Bolsonaro who preside over countries that have experienced a steep democratic decline.
- American democracy is arguably at risk as well — International IDEA included the U.S. on its "backsliding democracies" list amidst the passage of state laws that make it harder to vote and the installation of partisan loyalists in key election posts.
- The world has taken notice of democratic struggles within the U.S. — a recent Pew Research Center study found only 17% of people in surveyed countries called American democracy worth emulating, and 23% said it was never a good example.
What they're saying: In his opening remarks at last week's summit, President Biden called democratic erosion — which he blamed in part on the dissatisfaction of citizens with their democratic governments — "the defining challenge of our time."
The big picture: Democratic decline stems in part from the pandemic, as governments pursue policies to control the virus that involve restricting civil liberties like free movement and as citizens become frustrated that those policies haven't yet brought an end to COVID-19.
- But as income inequality and more general feelings of insecurity rise, life in an illiberal democracy may seem preferable to the complexities of living under a full democracy.
- That means, as Biden told Congress in an address in April, that democratic leaders have to prove "that our government still works — and we can deliver for our people."
Context: Authoritarian countries like China are taking advantage of democratic woes to tout their own systems, Axios' Bethany Allen-Ebrahimian reported recently.
What to watch: How free and fair U.S. elections in 2022 and 2024 are.
- America is still the democratic bellwether, and a repeat of the chaos of 2020 — or something worse — would be a crippling blow to democracies around the world."
GET THIS RIGHT . . .Only the Internal Revenue Service knows who the largest taxpayer in American history is, though.
Elon Musk May Well Have The Biggest Tax Bill This Year: Over $8 Billion
"On Tuesday evening, Elon Musk made a bold claim on Twitter: That he would pay more taxes than any American in history this year.
Musk might be right. The eccentric billionaire (and the world’s richest person) likely owes the federal government at least $8.3 billion for 2021, Forbes estimates, based on his stock sales of nearly $13 billion through December 13. Amazon founder Jeff Bezos came close last year, selling $10.2 billion worth of stock in his company; the tax bill on that might have been as much as $2.4 billion. Only the Internal Revenue Service knows who the largest taxpayer in American history is, though.
More key context: In some prior years, Musk has paid little to no taxes. According to a ProPublica investigation publishedin June, Musk paid a total of $455 million in federal income taxes between 2014 and 2018, while his wealth grew by $13.8 billion; Musk paid no federal income taxes at all in 2018. (He also didn’t sell any shares of Tesla that year.)
It's possible he has other sources of income that will raise his 2021 tab, or that he's using business losses from elsewhere in his holdings—a common tactic among the super-rich—to lower his bill. Musk also sold a half-dozen California mansions this year, which likely produced income subject to taxation.
Musk dodged a pricey bullet in October, when Sen. Ron Wyden (D-Ore.) introduced a short-lived plan that would’ve taxed the unrealized capital gains of America’s richest people, which Forbes estimates might have cost Musk $29.8 billion. But within days, the plan was replaced by a less drastic measure.. Because Musk doesn’t currently receive an annual salary from Tesla, and the company doesn’t pay out any dividends, Musk probably would have owed Uncle Sam no taxes— until he began unloading Tesla shares at an unprecedented pace starting in November.
His tax bill could be higher still if California goes after him. Though Musk relocated to Texas last year, his former home state could tax Musk on the value of options he earned while residing there. Between state and federal taxes, Musk could end up with an overall tax rate north of 50%. (While some types of options can be exercised without triggering immediate taxes, and the proceeds from share sales are taxed at lower capital gains rates—Musk’s stock options are “nonqualified,” meaning they will likely face the much higher ordinary income tax rate imposed on compensation, according to tax lawyer and Forbes contributor Bruce Brumberg.)
Musk could lower his tax bill this year if he donates Tesla shares–or cash–to his charitable Musk Foundation or directly to one or more nonprofits. Taxpayers who itemize donations can deduct some charitable giving from their adjusted gross income. Based on a read of filings with the Securities and Exchange Commission, Musk hasn’t donated any Tesla shares so far in 2021; the last time he did that was in December 2019, when he put 11,000 Tesla shares–then worth $4.1 million–into his foundation.
The taxman isn’t done yet. Another $7 billion worth of federal taxes may await Musk if he makes good on his recent promise to sell a full 10% of his Tesla shares. (So far, he’s sold about 3.2% of his stake.) He’d have to pay the IRS roughly $2.65 billion in additional capital gains taxes based on Tesla’s stock price on December 15, plus another $4.4 billion if he exercises the rest of his stock options set to expire in August 2022–if Tesla’s stock price stays where it is.That is not a given; the shares have fallen nearly 22% from their peak of $1,222 on November 1, 2021.
Musk’s Tuesday tweet was part of a tirade against Sen. Elizabeth Warren (D-Mass.), the latest installment in his social media feud against progressive politicians. After Sen. Warren tweeted calling for a change in the “rigged tax code” in order to compel Musk to “actually pay taxes and stop freeloading off everyone else,” Musk responded with chutzpah: “Please don’t call the manager on me, Senator Karen.”
On Monday, Time Magazine named Musk its “Person of the Year”, sparking Sen. Warren’s tweet about the CEO’s tax obligations.
Musk did not immediately respond to Forbes’ request for comment about his tax bill."
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